Natural Gas ETF Draws Bearish Options Traders

By Brendan Conway

It’s downright balmy on much of the East Coast these days. The weather isn’t well received by natural gas bulls.

A surprise jump in U.S. natural gas inventories sent the commodity to its sixth straight drop on Thursday. Meanwhile, traders in bearish put options on the most popular gas ETF appear to be looking for more.

Interactive Brokers equity options analyst Caitlin Duffy notes what looks like buying activity in put options on the United States Natural Gas Fund (UNG). The puts profit the farther the fund falls below $18.45 over the next week or so. UNG is down 1.3% to $19.11 this afternoon.

Here’s Dow Jones Newswires’ John M. Biers on the unexpectedly large build in U.S. gas inventories:

The inventory report said that natural gas inventories increased by 2 billion cubic feet, an unusual build for so late in the season. Analysts had expected a withdrawal of 4 bcf. The total amount of gas in storage is now the highest for this time of year since the U.S. Department of Energy began collecting data….

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